DESCRIPTION (Applicant's abstract): Almost a million children nationwide are in state custody for either abuse, neglect, status offenses or delinquency. These children are at significant risk of chronic mental health problems, but the problems are not addressed adequately by the systems that care for them. In fact, the risks these children face are compounded by poor custodial decision, inadequate services, and inappropriate residential placements. Many of these service barriers result from the rigid, centralized, bureaucratic work environments in which the services are provided. These work environments hurt service outcomes because they focus the attention and effort of caseworkers on paperwork and red tape rather than the children's needs and well-being. In addition, they harm the caseworkers' relationships with the children and detract from the commitment that is necessary for positive service outcomes. The goal of this study is to assess the effectiveness of a system intervention that is designed to improve the work environments and services provided by casework units in a public children's service system. Forty (40) urban and rural casework units are randomly assigned to treatment and control groups. A one-year, multi-component intervention is introduced to the casework units in the treatment group. The intervention improves work environments and services by decentralizing and deregulating the casework units and focusing casework activity on the individual needs and well-being of the children. The effectiveness of the intervention is assessed by comparing the treatment and control casework units on the quality of their work environments and the outcomes of services provided to 1600 children.